Home Latest PA66 PRICES IN DECEMBER CLIMB UP TO €300/mt

PA66 PRICES IN DECEMBER CLIMB UP TO €300/mt

December 9, 2020
There is a strong chance that the current momentum will result in further increases in January and possibly throughout Q1.

PA66 prices in December climb up to €300/mt for some buyers amid tight supply.

Buyers have so far been able to resist major increases even if the market was getting gradually tighter every month.

But market dynamics have shaped to support major increases in December.

Supply issues

While demand has continued to increase during a time of the year when an ease is expected, supply issues have emerged.

Two producers, one in the US and one in Europe have had plant issues.

After the climb to over €4,000/mt in 2018, nylon 66 (PA66) prices declined considerably since. The coronavirus provided further weakness and sunk the market further in H1 2020.

But after the summer, almost all downstream segments, including automotive, staged a recovery.

There is now enough upward momentum to support this trend into Q1.

Nevertheless, downside risks from the coronavirus could play out later in 2021 due to a loss of confidence over vaccines and a prolonged pandemic.

But in the meantime, the PA66 market in Europe remains tight, with many buyers on allocations. And most are accepting big increases from November to December, of up to €300/mt.

While price levels are far away from what they were at the height of the shortages a couple of years ago, many buyers are nervous.

Severe shortages

Market dynamics are showing some signs of what happened in 2018, namely production issues amid strong demand.

And currently demand, even for this time of the year, is robust, from electrical and electronics to automotive.

Several compounders are confident to end the year at break even or even better than last year.

However, despite the overall price gains, some buyers are still not experiencing big increases.

Some accounts in October and November managed to negotiated rollovers until the end of the year.

As such, it is likely that they might have to absorb a big jump in prices in Q1.

If the auto industry and strong demand in China starts to ease and production issues are resolved, then the upside will most likely reduce.

But while overall demand continues to rally amid production issues, buyers will struggle to argue for rollovers or even small price increases in January.

PA66 Prices Percentage Price Change Monthly
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